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Is Ottawa's fiscal update crisis a repeat of history?

It's not often in the modern era that we get to re-live history, but such a time may be upon us with the political brinkmanship now underway in Ottawa.

Canadians — it's almost unbelievable to write these words — seem about to experience a constitutional crisis similar to that endured by our grand- or great-grand parents during the famed (infamous) King-Byng affair in the mid-1920s.

It began yesterday, when Prime Minister Stephen Harper's minority Conservative government (through finance minister Jim Flaherty) tabled an Economic and Fiscal Statement in the House of Commons. (The ironic title of the document: "Protecting Canada's Future.")

All three of Canada's opposition parties — the Liberals, the New Democrats and the Bloc Quebecois — quickly declared they could not support the statement and intended to vote against it.

The Conservatives have 143 parliamentary seats; the three opposition parties have a combined total of 163. (The opposition total actually is 162, because one of the Liberals, Peter Milliken, is the Speaker). The House also has two independent MPs.

Those numbers indicate that it is entirely possible that the combined opposition parties could defeat Flaherty's statement in a House of Commons vote. And because the statement concerns the Harper government's fiscal policies, its defeat would translate into the defeat of his Conservative administration.

Before looking at the consequences of such an event, let's briefly consider Flaherty's statement and why the opposition parties will not support it.

Nearly two weeks ago, at a meeting of G-20 leaders in Washington, D.C., Harper said he was considering "short-term deficit spending" to stimulate Canada's economy during the current global downturn.

The Prime Minister reiterated that sentiment last weekend at a meeting of the Asia-Pacific Economic Co-operation (APEC) leaders in Lima, Peru. "The most recent private sector forecasts suggest the strong possibility of a technical recession the end of this year, the beginning of next," said Harper.

He added, in regards to concerns about world-wide deflation, "This is a worrying development, one of the reasons why it may well be necessary to take unprecedented fiscal stimulus."

Those statements by the Prime Minister, and similar comments by other leading Conservatives, led many observers to believe that Flaherty would introduce measures to stimulate Canada's economy.

That is, it was widely expected that the Tories would spend several billions of previously unbudgeted dollars to mitigate the impact in Canada of a "technical recession" and the pernicious effects (as the Prime Minister said) of deflation. Almost certainly, Ottawa's finances would return to deficit after more than a decade of surpluses.

But to the surprise of nearly everyone, Flaherty's statement did no such thing. Incredibly, the finance minister signaled his short-term intention to maintain balanced budgets. And rather than spending billions of new dollars to off-set Canada's "technical recession," the Conservatives intended to cut selected government expenditures.

The centre-piece for Flaherty's spending cuts seemed to be a political subsidy that gives federal political parties taxpayer monies based upon the number of votes received in the preceding election.

The Conservatives, simply, seemed more concerned with maintaining a balanced budget than addressing Canada's "technical recession."

Moreover, they looked petty for eliminating an item of expenditure that greatly benefited other political parties.

All three opposition parties responded in kind. Instead of focusing their concerns on the government's failure to deal with the recession and speaking up for Canadians affected by the deteriorating economy, they howled in outrage over the abolition of their own election subsidy.

As a consequence of being upset, the Liberals, New Democrats and Bloc Quebecois have vowed to defeat the Harper government next week in the House of Commons.

Barring some kind of compromise between now and then, the Conservative government will fall. Presumably, Harper would visit with the Governor General, Michaelle Jean, and inform her that his party did not have the confidence of the House. He then would ask her to dissolve the newly-elected House of Commons, thereby setting in motion another federal general election.

Not so fast, the opposition parties are saying. It seems that the Liberals, NDP and Bloc are having discussions amongst themselves about forming a coalition government. (Don't laugh. Yet one wonders about the reaction to such a plan by Michael Ignatieff and Bob Rae, both of whom hope to succeed dead-duck Grit leader Stéphane Dion.)

In theory, representatives from the Liberals, New Democrats and Bloc Quebecois also could visit Madame Jean. They could tell her that their coalition, unlike the Tories, had the confidence of the House. Don't dissolve parliament, they would say, let us have the opportunity to demonstrate that we can survive in the House of Commons.

Canada lived through a similar experience more than eight decades ago. In the 1925 general election, prime minister Mackenzie King's Liberals lost 17 seats from the previous contest, and returned just 99 MPs.

Arthur Meighen's Conservatives elected 116 MPs, while the Progressives had 24 seats. (Six seats went to other parties or independents.)

One might think that Meighen's Tories, which had won the greatest number of seats, would form a minority government. But King refused to step down, saying he could maintain the confidence of the House with support from the Progressives.

The Governor General, Lord Byng, was in a pickle, and the result was a constitutional crisis that lasted until a general election was held 11 months later.

Are we now experiencing something similar? It seems, to repeat words used earlier, almost unbelievable.

Will McMartin is a regular contributor to the Tyee.

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